Good morning and welcome to episode 682 of ‘Talking Bull’. In this video/podcast we cover the main headlines and what to expect from the day ahead.
We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.
We hope you enjoy it!
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Joe mad e1.41R on Ethereum, Jamie was offside 0.12R on EURAUD, Steve was stopped on Oil.
We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.
We are currently up 159.80% collectively since we began recording Talking Bull on the 30th October 2019.
US PMI services in contraction….
The final US PMI services index for August was revised slightly lower to 43.7 from the flash reading of 44.3 and following a 47.3 reading for July.
… but ISM data indicates solid growth
The ISM non-manufacturing index strengthened slightly to 56.9 for August from 56.7 the previous month and above consensus forecasts of 55.1. Business activity and new orders increased at a slightly faster rate while there was a marginal increase in employment for the month. There was a slight easing of supply-side difficulties while there was only a slight easing of inflation pressures for the month.
US yields surge again
Treasuries remained on the defensive ahead of the New York open with yields moving higher. The stronger than expected US ISM data had a greater impact in markets and triggered another round of losses in Treasuries with the 10-year yield increasing to 10-week highs around 3.35%.
Yen continues to slump, dollar at 20-year high
The increase in yields underpinned the dollar and triggered a further round of yen selling as yield spreads undermined the Japanese currency.
Further verbal intervention had little impact in curbing yen selling and the dollar surged to fresh 24-year highs above 144.00 before correcting slightly.
The dollar index posted a fresh 20-year high.
Substantial UK fiscal support confirmed
Following the appointment of Truss as the new Prime Minster, there remain clear indications that there will be a very substantial fiscal package of at least £100bn to ease the energy crisis.
UK gilts dipped sharply with the 10-year yield at 11-year highs around 3.15%.
Bank of Canada to hikes rates again
The Bank of Canada is expected to increase interest rates again at Wednesday’s policy meeting with consensus forecasts of a further 75 basis-point increase to 3.25%.
As well as the rate decision, the forward guidance from the bank will inevitably be important for the Canadian currency moves.
10.00: Bank of England Treasury Select Committee hearings
15.00: Bank of Canada policy decision
17.35: Fed Governor Brainard speech
Key events over the next week
September 8th: ECB policy decision
September 9th: Canada employment report
Gun to head challenge – Update
Today’s trade idea
Have a great week everyone.